Episode 26: The importance of people management

People. They’re at the centre of everything you do in small business. So people management and culture building should be a top priority for any leader or manager.

This week Steve Vamos joins Xero In hosts Rob Stone and JV Douglas to share insights from his three decades of experience in leadership roles across companies including IBM, Apple, Microsoft and Ninemsn.

“The mindset of leaders, the way that leaders think and the people around them think defines an organisation’s fate,” Steve says.

Tune in to find out how to frame your leadership approach for the current, turbulent times, and why people management should always come first.

Episode transcript

Hosts: Jeanne-Vida Douglas [JVD] and Rob Stone [RS]

Guest: Steve Vamos [SV]

SV: Too many leaders think they have a strategy that they’re going to tell everybody and the truth is until your people tell you in their words what you told them, they haven’t got it. You haven’t communicated.

RS: I’ve been a big fan of Steve Vamos for quite a long time and I can’t wait to hear his thoughts around being a good people manager and the importance of it.

JVD: Yeah, and the – the really fascinating thing about Steve is not only does he have a – an – an excellent insights that he’s openly shared throughout his career, he’s got this amazing track record of having worked in companies during incredibly challenging times.

RS: Yeah. Can’t wait to talk to Steve around how to manage people in the best way and the importance of culture, purpose, mindfulness – as a business leader what comes first to drive success in an organisation.

JVD: Yeah, let’s switch to him now.

Today we’re joined by Steve Vamos who’s headed up some of the world’s most successful companies including Microsoft Australia, Apple Asia Pacific and Nine MSN and steered these companies through some pretty challenging times. He’s currently the non-executive director on a number of corporate boards and heavily involved with the startup community. Steve, thanks so much for joining us.

SV: Hi, good to be here.

JVD: There’s been a very strong theme throughout your career of focusing on people and the importance of treating people well and giving them an opportunity to do their best. I’m wondering if you could talk us through where those ideas first started in your career, and – and how they’ve changed as you’ve – as you’ve sort of held these really important roles in corporate Australia.

SV: If you look at my career I’ve sort of been in, I don’t know whether you call it the wrong places at the right time or the wrong time. But I had to manage through IBM’s difficulties. In fact I announced the first ever redundancies in IBM’s history back in the early 90s when I was the general manger of their business in Perth.

That was a company that had jobs for life… up until that point. And then I went to Apple and lived through the traumas at Apple through three CEOs and then the dot.com crash and through all of that what I really observed was that the mindset of leaders, the way that leaders think and the people around them think defines an organisation’s fate. And that’s when I really started to understand the human side of business is so much more important.

I kind of remember the first time I was managing people and I had feedback on my management style. I thought I was really good, I thought I was a really great leader and someone I’d love to work for and then I got this feedback which was awful.

People working for me said that I was a control freak, that I used them as tools to get my job done.

JVD: Wow.

SV: ... That I wasn’t particularly interested in them and I was shocked. I had no idea that that’s the way they saw me and that really shook me and woke me up. I remember talking to my wife about the fact that I had that feedback and she said, “well hallelujah you’re getting – you’re getting the message”. So…

[Laughter]

JVD: And that disconnect between who you thought you were as a leader and – and what was actually happening with the team you were working with, how common do you think that is and what, I guess, approaches should leaders be adopting in order to get that insight and respond to it in an effective way?

SV: Look, there’s nothing more valuable than getting feedback at work no matter who you are and it is a tragedy that we don’t give more of it and get more of it. It’s not comfortable, it’s not comfortable asking someone “how am I and what could I do better?”

Because, really, you don’t want to hear the bad news, it’s – you’re only human, it’s – it’s uncomfortable. But the truth is how can you ever get better if you don’t know where you’re not doing your best or you’re not performing to a particularly good level. And if you look at professional sport and every other field of endeavour feedback is very direct, very frequent and very impactful. So why isn’t the case – that the case in business? And the reason it isn’t is that in business, we’ve sort of grown up with a culture or a mindset that is a little bit, like we’re a machine, not a human. You know, you join a company, you get told what you do and the – the – the comment or the direction is do your job. Just do your job.

And that’s changing now because bosses no longer are sure about what needs to happen because the world is changing so fast – and because the world is changing so fast more and more leaders of business want their people to be innovative, creative, come up with new ways and new pathways and their people are looking around going hang on a minute, for the last 10, 20, 30 years I’ve been working you wanted me to do what I’m told. Now you want me to help you invent or create the future, wow that’s a really really big shift and that means as leaders we have to change. It means we have to go from seeing ourselves as star players where our people are the support crew… to seeing ourselves as head coaches who are there to make our people great

And that’s because the value and the future of our company is in our people. And – and that’s there in the financials. If you look at the listed companies that trade on any stock market today or share market today, the value in those companies is no longer defined by physical and financial value on the balance sheet. It used to account for 80% it’s now 30. The value is the expectation that people are going to create new products and services and profits that’ll last well into the future.

RS: Through your career, working at some of the largest corporations in Australia, there must have been a lot of resistance at time where people didn’t understand necessarily where you were coming from. But how do you kind of get your own agenda across of saying this is the best way to go down, you know, we need to fix the culture, we need to focus on the people inside and then from that we can start prioritising all the other problems and fixing them down the line. How do you kind of overcome that resistance?

SV: It’s hard, even today I know that I’m not fully heard with what I’m saying. I’ve got conviction through experience, that the – the crazy experiences I had, you know, Apple, three CEOs in five years and seeing the profound change in each company with the attitude and mindset of those three leaders. One who was in a sense defeated by Microsoft and Intel and thought Apple could only win by being like them. Another who came in to follow that saw himself as a – as a turnaround guy and in turning Apple around he brought Steve Jobs and Wozniak back as advisers and then Steve Jobs stamping his authority on the company by fundamentally focusing it around a quarter of what it was doing.

So shutting down 75 percent of the product line to focus. They – they had a profound effect and – and all through organisations, we know that our managers and our leaders have a profound effect on us. So that’s – my conviction is high and leaders convictions vary depending on their experiences. A lot of people who have experienced running something you didn’t understand have a high conviction for this because they realise it was all about those around them, not them. So it – it varies. So in some board environments what I say about the people dimension gets taken up by the – the management. In other environments I’ve had it’s been less embraced because the leaders have a different perspective.

So as a director or as an – an adviser to – to management I think you have to appeal more to the tangible aspect of this rather than the emotional or the conceptual aspect and – so there’s a few processes that I always like to see which is, for example, one, you know, getting the leader of the organisation to rate the managers that worked with them. But at the end of the day it comes down to your belief, your conviction because belief is everything…

RS: Yep.

SV: …when it comes to business because there’s no startup that got money before it had belief.

RS: So would – would you prefer to work in a – a time of distress where a company’s going through crisis because it’s more likely to get that honest feedback and everyone’s pulling together to survive versus, I guess, that corporate malaise that occurs when you are the leader in a particular field and it’s less likely to get that feedback?

SV: Boy, that’s a – that’s a tough one. I don’t look at it that way anymore. And the experience that really changed me was being the CEO of Nine MSN. I was 40 years of age, I went in there as a well-trained manager, but I went into a company that I knew nothing about. So I knew nothing about advertising revenue and I knew nothing about media as a product and now I was a well-trained and experienced manager of a tech sales business in a completely foreign environment. Every meeting I went to I knew less than the people who worked for me, it didn’t matter what level they were in the company, they all knew more about advertising and media than I did.

So all I could do in those early years of being the CEO was go to meetings, listen, distil what I heard was a problem and then commit myself and the organisation to prioritising and fixing those problems. So for three years I managed with no domain knowledge. I managed with the experience of, you know, knowing how to do planning and management and managing people. I had good background there. Year four I was sitting in my office and I remember looking at the wall thinking I’ve got nothing to do, after two or three really hard years, I had nothing to do. I had the best team around me. I had a team that was clear about what we were there to do and what our priorities were and we had defined a culture that was a great culture over those years.

That culture was born of the honest and open discussion about our dysfunction. But what I realised was what a blessing I had of running a business without knowing anything about that business because it opened my eyes to the fact that my real role is not to be the know it all star player who controls people around me because of my experience on the field, but to realise the real influence and power I had was to make people on the field great and by clarifying what they were there to do, by resolving resource issues, by stamping out dysfunctional behaviours. So that’s all I did and that changed me.

JVD: So that transition from a generator of ideas to a facilitator of ideas that you underwent, what – what advice would you give to say, small business owners that would like to integrate – a feedback-driven model into their approach to management and create a workplace where people are able to contribute ideas and do their best work?

SV: Yeah, look, I think it starts by listening. So, and realising you don’t have to have all the answers, realising the people around you will be engaged and more keen to help if you’re prepared to listen to them and involve them. Too many leaders think they have a strategy that they’re going to tell everybody and the truth is until your people tell you in their words what you told them, they haven’t got it. You haven’t communicated. So I would say ask a lot of questions and listen openly to the answer and be careful about how you respond to the things you don’t like hearing and then you’re going to get a lot more buy-in.

But the net of it is, stop thinking of yourself as a star player who has to have all the ideas and make all the big calls and create all the – the right outcomes on your own. Now if you’re a sole trader and you’re just – it’s just you. I can’t help you that’s clearly what you’re going to have to do and I encourage you to get someone somewhere to be a bit of a coach for you to help you think about how you think from time to time. So you do get a bit of feedback or a bit of a – an external view. But as soon – as your business starts to grow, you have to transition to being a head coach who is there define the strategy with your people, with your team. There to decide and discuss and agree the – the way you’re going to behave and treat each other and your customers.

And then also work through difficult issues around prioritisation. So it’s about a head coach mindset now. I’m not silly enough to suggest that a small to medium business leader doesn’t need to get on the field and be a star player from time to time, that’s great. Do that, but don’t make that your main mode of operation. Make being the head coach of your organisation more your mindset.

RS: Do you think your paradigm will continue to evolve into the future and have you got like an – an insight of where you’re moving to, about your – your thoughts around how to be a good people manager?

SV: You know, I think that ultimately we live in changing times and as human beings, when we’re confronted with a change, or a reason to change or a force that’s affecting us, that drives us to have to change, we have to confront two – amongst many – human things. The first is we have to confront fear because any change we’re programmed to look at as a negative until we understand it fully.

And so when we talk about changing things in our business we have to understand that our people will start from a base of fear and resistance. So we have to confront that fear and then we have to build belief in them. One of the most common things you find is people say “we tried that a few years ago and it didn’t work”. Or, you know, “the ultimate boss won’t let us do that”. There’s assumptions, there’s lack of belief.

So you have to do two things, you have to address fear and build belief that is the role of a manager. And that’s why unless you’re focussed on your people, I don’t see how you’re going to successfully change your organisation because building belief and addressing fear is a really, really big job.

RS: I know you’re an avid reader as well, any kind of recent books that you’ve kind of gone…

SV: Yeah.

RS: “…this was really impactful.”?

SV: One that’s more for those who care and think about management as a function, you can’t beat Gary Hamel’s What Matters Now. Gary Hamel is – and you know, his stuff on YouTube is a really good reflection of many of the things I talk about in a – in a – in a different but very effective way. So that’s good.

The Lean Startup’s a good business book. It’s actually a shame they called it the Lean Startup because it’s really a book – it’s a book that reflects on the comments I made about product management. So this how cycle of how do we get a good, how do we get our product to continually evolve with the market and what is the management philosophy around that that brings my sales, my revenue, my user or marketing and my product and technology focus together really well.

JVD: Steve, I want to say thank you for coming in today because this has been a fantastic conversation.

RS: Yeah, thanks so much.

SV: Well, thanks for having me. I appreciate it.

JVD: Thanks for joining us.

RS: I just loved the fact that when you look at what’s most important in running a business it starts with the people first.

JVD: And why that focus on people is so important given the current economic challenges that all businesses are facing, and given that need to embrace change and create systems that are able to constantly change.

RS: That’s right and let’s not forget this is wisdom distilled from decades of experience working at all echelons in the – in the business community.

I loved his response to feedback as, you know, you really focus on listening, distilling, prioritisation and then that commitment to fix what’s been discussed.

You no longer have to be this leader that’s glorified as having, knowing all the answers, rather working with the teams as a leader that facilitates to get the answers.

JVD: Some absolute gems I think we can all take away and implement.

RS: So thanks again everyone for tuning in to Xero In. I hope you got a lot out of it, and if you have any questions for us or Steve, please use the hashtag Xero In.